Bates v. Bankers Life And Casualty Company

Supreme Court of Oregon

January 19, 2018

Lorraine BATES, Charles Ehrman Bates, Eileen Burke, Jaci Evans, as Successor Personal Representative for the Estate of Thomas Marier, and Dalla Francis, as Personal Representative for the Estate of George Alexander, Plaintiffs,v.BANKERS LIFE AND CASUALTY COMPANY, an Illinois insurance company and CNO Financial Group, INC., a Delaware corporation, Defendants.

Adam
J. Kaiser, Alston & Bird LLP, New York, New York, argued
the cause and fled the brief for the defendants. Also on the
brief were John M. Aerni, New York, New York, and Vicki L.
Smith, Lane Powell PC, Portland.

[362
Or. 338] Case Summary: The Ninth Circuit certified a question
to the Oregon Supreme Court: Does a plaintiff state a claim
under ORS 124.110(1)(b), which prohibits the financial abuse
of a vulnerable person, for "wrongful withholding of
money or property where it is alleged that an insurance
company has in bad faith delayed the processing of claims and
refused to pay benefits owed under an insurance
contract?" Held: Plaintiffs did not state a claim
because they alleged that defendants failed to pay out
required insurance benefits to vulnerable insurance
beneficiaries, but under ORS 124.110(1)(b), a plaintiff must
allege that a defendant wrongfully "continues to
hold" "money or property * * * acquired" from
the plaintiff. That requirement was not met here, the Court
explained, because an insured's contractual right to
insurance benefits are not "money or property" that
the insurance company "acquired" in the context of
ORS 124.110(1).

The
certified question is answered.

[362
Or. 339] BALMER, C. J.

This
case is before the court on a certified question from the
United States Court of Appeals for the Ninth Circuit under
ORS 28.200 and ORAP 12.20. See generally Western
Helicopter Services v. Rogerson Aircraft,311 Or. 361,
811 P.2d 627 (1991) (discussing factors court considers in
exercising discretion to accept certified questions). The
certified question relates to claims under ORS 124.110 for
financial abuse of "vulnerable persons"-here,
elderly persons-who purchased long-term care insurance from
defendant Bankers Life & Casualty Co. (Bankers) and
sought to receive insurance benefits under their
policies.[1]The Ninth Circuit certified to this court,
and we accepted, the following question:

"Does a plaintiff state a claim under Oregon Revised
Statutes 124.110(1)(b) for wrongful withholding of money or
property where it is alleged that an insurance company has in
bad faith delayed the processing of claims and refused to pay
benefits owed under an insurance contract?"

For the
reasons that follow, we answer in the negative: Allegations
that an insurance company, in bad faith, delayed the
processing of claims and refused to pay benefits owed to
vulnerable persons under an insurance contract do not state a
claim under ORS 124.110(1)(b) for wrongful withholding of
"money or property."[2]

We take
the facts from the Ninth Circuit's certification order,
supplemented by the federal court pleadings. The
certification order states:

"Plaintiffs are elderly Oregonians or their successors
who purchased long-term healthcare insurance policies sold by
[Bankers and its parent company]. These policies [362 Or.
340] are designed to provide health services for elderly
people who can no longer care for themselves and are intended
to cover expenses for in-home care providers, assisted living
facilities, and nursing homes.

"Plaintiffs allege that Bankers developed onerous
procedures to delay and deny insurance claims. Examples of
these procedures include failing to answer phone calls,
losing documents, denying claims without notifying
policyholders, denying claims for reasons that did not
comport with Oregon law, and paying policyholders less than
what they were owed under their policies. Bankers allegedly
collected premium payments and, without good ...

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